Use the Following to Answer Questions

question 25

Multiple Choice

Use the following to answer questions :
Figure: The DVD Rental Market
-(Figure: The DVD Rental Market) Look at the figure The DVD Rental Market. At a rental price of $3, there will be:

• A)equilibrium in the rental market for DVDs.
• B)an increase in demand.
• C)an excess supply of 40 DVD rentals.
• D)an excess demand of 40 DVD rentals.

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Definitions:

ROE

Return on Equity, a profitability measure that calculates the ability of a company to generate profits from its shareholders' equity.

Profit Margin

A financial ratio that shows the percentage of revenue that exceeds the cost of goods sold, indicating the profitability of a company.

Assets

Resources owned or controlled by a business, individual, or entity, considered valuable because they can produce positive economic value or provide future benefits.

Current Ratio

A financial ratio indicating a firm's capacity to settle its short-term liabilities with assets that can be easily converted into cash within a year.